Q. Howard Armitage: What are your predictions for the marketplace? Mohan, perhaps you will answer for the U.S. marketplace and Paul, you can answer for the Canadian marketplace?

A. Mohan Nair: ABC is the gateway into the field of performance management, or what you might call the analytic business, which is consuming ABC as an engine of very accurate information. Within five years we'll have to solve the problem of the amount of work associated with gathering information, putting it together and then explaining it to a group of people that do not understand the analytics as well as we think we do. I see us being consumed into performance management—the analytic engine and we could be the leaders or the losers, depending on how we shake it up.

A. Paul Sharman: About 40% of the U.S. economy is driven by e-commerce and the Internet presently, and it will expand substantially in the next 10 years. I guess the conclusion I draw from that is the world is changing rapidly. It's fuelled by computing and communications. We are dealing with business that is getting smarter on the applications of software. Business is about knowledge. And what computing and communications tools permit us to do is to facilitate rapid change, rapid adaptation. For accountants, the challenge is to make the transformation from being focussed on the past, to being focussed on the future, management choices and the risks associated with any potential business decision. I really believe that in five years time, accountants will be advising executives on all aspects of value creation in the business and software will be the facilitator of that process.

Q. Howard Armitage: Let me switch to another question that seems to always come up at these types of events…. organizations spend considerable resources learning first about ABC, ABM and other types of similar models. They also spend considerable time on implementation and adoption, but the success rate has not been overly high – in fact possibly more like a 50% failure rate. So, why is failure so high? What’s causing it and what can be done to turn that around?

A. Mohan Nair: It depends on what you mean by failure? Let’s say an organization decided to do a one shot ABC and it lasts ten weeks or three months and they have results and then they change their strategy. They don’t choose to continue with ABM anymore…. would that be considered a failure? In looking at installations with my 3,000 customers, as I was starting to do the research for my new book, I found that they defined failure and success very differently. So I think you need to understand what success or failure really means. It all depends on your strategy towards the project. If your strategy is to do it in one shot, then you've succeeded in one shot.

A. Derek Sandison: I see two main reasons: one, in any organization we're still seeing that this initiative is driven from the top of the company, and if it isn't driven from the top of the company, it just doesn't work. You need to have the backing of the board, you need to have the backing of the senior operational executive of the company. If you haven't got that, you can develop an isolated initiative, if you like, which gives local benefit, but it doesn't become part of the culture of the overall organization. Two, the second thing is this – (implementing ABC) it is hard. It's hard collecting all the driver information. It's hard making it easy. It's hard getting people to buy in because they think you're watching them – they get worried about the value added and non-value added thing. I think we've got to find a better way of collecting that information. Whether it's technology, whether it's education, whether it's a combination of both . . . Technology has been a constraining factor. We need software to deliver information in the right way to the right people who are going to use that information.

A. Tony Braniff: Building on that, I've seen some examples of organizations get pretty bogged down with trying to get information collected, because there’s too much focus on it being an accounting exercise, rather than looking at it as a management initiative.

A. Ford Clancy: I think failures happen because of methodology. You really have to integrate processes throughout the organization. It's like cultural integration and technical integration. The right people have to do the right job at the right time in the right way.

A. Paul Sharman: I agree to some degree with my associates from the software companies, but they approach the subject from the perspective that their products satisfy an obvious need. Personally, I think that there have been many ABC applications that have failed to meet executive expectations because they were promised that ABC would provide them a meaningful management tool. It seems to me that ABC in general has been approached simplistically. ABC is a necessary cost methodology, but, by itself, it is insufficient to drive significant change in the way an organization operates. To be useful, ABC needs to be used within the context of an overall and integrated measurement and management system focused on the primary measure of value creation (such as shareholder value added). This means that ABC is used along with measures systems (whether a populist model such as Balanced Scorecard or other), process management and organization design.